Hassan takes on Schering-Plough revival
pharmafile | October 28, 2003 | News story | |
Fred Hassan has outlined his plans to turn round the fortunes of struggling Schering-Plough after being installed as the company's new chief executive.
Mr Hassan left the top job at Pharmacia after its acquisition by marketing partners Pfizer was finalised in mid-April, passing up the vice chairman role at the new company to take on the challenge of Schering-Plough.
Morale at the company has taken a battering as it struggles to deal with falling profits and Government investigations into its financial disclosure and sales practices.
Mr Hassan has now signalled that his first priority will be to resolve these corporate governance issues and make the company's culture more transparent and investor-friendly.
"Schering-Plough is a company with a proud heritage. I believe in its long-term future. While there are significant challenges, my goal will be to deal with the urgent issues and establish strategies for growth. Business integrity, quality and compliance will be at the top of our agenda", he said.
"I look forward to working with the people of Schering-Plough as we meet the challenges and subsequently get on to a long-term growth track".
The 57-year-old has already made it clear that these long-term plans could include acquisitions to strengthen the business. Mr Hassan was behind Pharmacia's purchase of Monsanto, which, along with internal restructuring, helped transform the company in his five years at the helm.
The company will now delay the announcement of its first quarter results until 13 May to allow Mr Hassan to review the company's financial health.
Schering-Plough has already taken a massive hit to its earnings a drop of nearly 30% in US sales in the fourth quarter of 2002 followed the patent expiry of blockbuster Claritin but the pain is far from over.
Earnings are forecast to fall by half for the year, while first quarter earnings estimates of 10 cents per share represent a drop of 76% on the same period last year.
Mr Hassan has indicated that the company must stop this haemorrhaging before it can consider moves to expand its business, such as in-licensing.
Just days before the new chief executive was appointed the company announced a new and potentially lucrative alliance with Novartis.
The companies will now co-develop and market a product combining Schering-Plough's inhaled corticosteroid Asmanex and Novartis' beta-2 agonist Foradil for the treatment of asthma and COPD.
GlaxoSmithKline's Seretide and AstraZeneca's Symbicort are two existing examples of these single inhaler products, and represent the fastest growing segment of the global asthma market.
Schering-Plough and Novartis believe their new combination can claim a sizeable proportion of this segment in an otherwise mature market.
Meanwhile, the novel cholesterol absorption drug Zetia remains Schering-Plough's brightest new hope and has now been launched in all major markets around the world. The drug enjoyed a good US launch in November, with 100,000 prescriptions written and revenues of $23 million in the final quarter of 2002.
